The South of Minas gerais and the 21st century governance of the global production network of coffee
Coffee; Global Production Network; Financialization; Food Systems
Coffee. Marketed worldwide as green beans, roasted and ground, soluble and in capsules, as well as in various ready to drink beverages, its production and consumption dynamics express an international division of labor, in which countries in the South grow and countries in the North consume. Brazil presents itself as an outlier, for it produces more than a third of the world's coffee and is the second largest consumer after the United States. The south of Minas Gerais stands out as the main coffee region in Brazil, accounting for a third of the national stock and ten percent of world coffee. In this context, the present research aims to answer why Brazil, and the south of Minas Gerais in particular, is unable to capture a larger portion of the income generated by the global production network of coffee. The research shows that the difficulties encountered by regions and by specific social groups dedicated to coffee growth, in Brazil and in the world, reflect relationship arrangements that support specific governance patterns; with emphasis on private regulation, firms’ consolidation and internationalization, and financialization.
Added to this are the effects of the so-called Coffee Paradox, which contrasts the devaluation of beans and their producers in the South with the appreciation it receives in coffee shops and retailers in the North. The research is built from a variety of sources (oral and textual) and uses quantitative and qualitative methods. Primary sources involve 44 interviews and field work in Minas Gerais. Secondary sources correspond to the analysis of data on the world and Brazilian coffee market from public and private institutions, companies, cooperatives, universities, think tanks, and research institutes, as well as from the specialized literature on the topic. This research supports the hypothesis that the performance of private and public actors involved in the coffee business in Brazil has been insufficient to overcome the condition of subordination and reverse the patterns of inequality that characterize the network. The specialty coffee market presents itself as an alternative capable of reversing inequality patterns, as it opens up possibilities for shortening commercialization and consumption circuits and remunerating farmers in a better and fairer way. However, the data mobilized in the survey indicate that it is largely dominated by corporate dynamics. Furthermore, the growing appreciation of coffee in the North is mainly due to immaterial attributes created at the time of consumption, so that the rent earned is not reverted to farmers. With a network controlled by large multinationals located in the North, the current governance standard fails in creating a more equitable and fair distribution of income and power, demonstrating the limits of integration strategies. Necessary changes point to the strengthening of state capacities to support national agriculture and industry, as well as the collective construction of trajectories for more autonomy and emancipation.